ACC00130

Auditing

Unit Information Guide

Session 1 2012

 2012 Southern Cross University Southern Cross University Military Road East Lismore NSW 2480 No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher. Copyright material indicated in this work has been copied under Part VB of the Copyright Act 1968.

Contents
Contacts and MySCU ............................................................................................................... 4 Unit assessor ................................................................................................................... 4 MySCU ........................................................................................................................... 4 Elluminate Live! ............................................................................................................. 4 Where to get help ...................................................................................................................... 5 School enquiries ............................................................................................................. 5 Technology Services ...................................................................................................... 5 Academic Skills Development ....................................................................................... 5 Student Services ............................................................................................................. 5 Library ............................................................................................................................ 5 Managing your study ................................................................................................................ 6 Important information read this first........................................................................... 6 Resources ....................................................................................................................... 7 Unit statement ............................................................................................................................. 9 Description ..................................................................................................................... 9 Aims ............................................................................................................................... 9 Objectives ......................................................................................................................10 Graduate attributes ........................................................................................................10 Handbook entry .............................................................................................................10 Syllabus .........................................................................................................................11 Prescribed texts and materials ......................................................................................11 Recommended reference materials .............................................................................. 12 Student assessment requirements ................................................................................. 12 Student academic integrity........................................................................................... 13 Student feedback ...........................................................................................................14 Assessment details ................................................................................................................. 15 Assignment submission ................................................................................................ 15 Assessment tasks .......................................................................................................... 15 Final examination ......................................................................................................... 15 Census dates ..................................................................................................................16 Suggested study timetable ...................................................................................................17

Contacts and MySCU

Unit assessor
Stephen Rowe Location: Phone: Email: R3.31, Lismore campus +61 2 6620 3047
stephen.rowe@scu.edu.au

MySCU
The MySCU site for this unit enables you to access resources and communication tools and links that are integral to your study throughout the teaching period. Contact details for teaching staff and information and messages specific to the unit are provided, together with grades and grading standards and the referencing requirements specific to your area of study. You will also find links to services to support your study, such as the University Library and Division of Teaching and Learning (Academic Skills Development). You should check the following location in your browser:
http://learn.scu.edu.au

This opens the MySCU student intranet page. The names of units in which you are currently enrolled that have an online presence will be listed here under Learning Sites. If your unit is not listed under Learning Sites and you have been instructed by your lecturer to access the online site, please check your enrolment status through MyEnrolment. If you do not appear to be enrolled in that unit, either enrol in that unit or email a variation request to Student Services:
enrol@scu.edu.au

If you are enrolled in that unit but cannot access the online site send an email to: Lismore, Gold Coast and Tweed Heads
servicedesk@scu.edu.au

Coffs Harbour
chec.helpdesk@scu.edu.au

Elluminate Live!
Your unit assessor may choose to use Elluminate Live! in this unit. Elluminate Live! is webbased audio-conferencing software for real-time collaboration; a mix of a teletutorial and virtual classroom with additional features. You can find out more by clicking the Elluminate Live! Help button within your MySCU unit, or go to:
http://www.scu.edu.au/elluminate
4

Where to get help

School enquiries
Undergraduate Business courses
Email: studybusiness@scu.edu.au Website: http://www.scu.edu.au/business-school Post: Southern Cross Business School Southern Cross University PO Box 157 (Military Road) Lismore NSW 2480 Australia Phone: +61 2 6620 3835 or Free call 1800 626 481 and ask for extension 73835

Technology Services
Lismore
Phone: +61 2 6620 3698 Email: servicedesk@scu.edu.au Website: http://www.scu.edu.au/it/servicedesk/

Coffs Harbour
Phone: Email: Phone: Email: +61 2 6659 3080
chec.helpdesk@scu.edu.au

Gold Coast and Tweed Heads

+61 7 5506 9210
servicedesk@scu.edu.au

Undergraduate IT courses
Email: studyit@scu.edu.au Website: http://www.scu.edu.au/business-school Post: Southern Cross Business School Southern Cross University PO Box 157 (Military Road) Lismore NSW 2480 Australia Phone: +61 2 6659 3209 or Free call 1800 626 481 and ask for extension 83209

Academic Skills Development

(Division of Teaching and Learning)

Lismore
Phone: +61 2 6620 3386 Email: academicskills@scu.edu.au Website: http://www.scu.edu.au/academicskills

Coffs Harbour
Phone: Email: Phone: Email: +61 2 6659 3323
academicskills-coffs@scu.edu.au

Gold Coast and Tweed Heads

+61 7 5506 9219
academicskills-tgc@scu.edu.au

Postgraduate Business courses

Email: studypgbusiness@scu.edu.au Website: http://www.scu.edu.au/business-school Post: Southern Cross Business School Southern Cross University Locked Bag 4 (Brett Street, Tweed Heads) Coolangatta QLD 4225 Australia Phone: +61 7 5506 9364 or Free call 1800 626 481 and ask for extension 19364 Fax: +61 7 5506 9301

Student Services
Lismore
Phone: +61 2 6620 3452 Email: stuadmin@scu.edu.au Website: http://www.scu.edu.au/services/
studentservices/

Coffs Harbour
Phone: Email: Phone: Email: +61 2 6659 3777
sservice@scu.edu.au

Gold Coast and Tweed Heads

+61 7 5506 9200
tgcc@scu.edu.au

Library
Phone: 1800 659 460 (Freecall) Website: http://www.scu.edu.au/library
5

Managing your study

Important information read this first
Delivery mode
However you have chosen to enrol, using the regular internal or external (University-wide) or newer online category, this unit has been chosen by the University and School to continue trialling a flexible online delivery strategy. Any feedback about this flexible approach will be most valuable and is welcome. Please use the General discussion forum (DF) in the MySCU site for this unit to share your views. The University is is continuing to explore various options for more flexible delivery to best serve the multi-campus and distance student profile we cater to. Evidence of this is offered by the following extracts from the Vice Chancellors Progress Report (January 2009) on the Poole Report (2008) into Becoming a Truly Multicampus Institution a Route Map: E-learning is highlighted as an option to supporting a distributed approach by SCU. (p. 2) adopted the aspirational target to provide all teaching materials in electronic format (MySCU, eResearch, CD-ROM etc.) VCEC also supports electronic submission and marking of assessment items, and this issue is now included as part of the agenda for the Converged Delivery working group. (p. 3) Course pilot studies in each School/College on flexible modes of delivery will be undertaken throughout 2009 and 2010. (p. 4) It is unlikely that one single option will ever serve or suit the needs of all students, or all units to be delivered. The flexible online approach used for this unit has been evolving since 2004. You can be assured there are many features included as a result of valuable student feedback. You are at the very leading edge. To reinforce this, consider the important benefit of exposing you to online approaches currently rolling out within the accounting profession for significant components of their Professional Development (PD) training. The platform used is a similar tool to Blackboard Collaborate (formerly Elluminate). Once again, this places you at the leading edge of developments within the profession developing a very valuable graduate attribute. Check out: http://www.charteredaccountants.com.au/
Training/LiveOne

The overall intention is to structure the delivery to support your learning. All contact with staff will be online using Blackboard Collaborate (hereafter BB Collaborate) and discussion forums (DFs). The idea is to offer you flexibility about accessing help when you need it rather than being constrained to the normal class timetable. Of course, where practical, personal contact with staff is welcome by appointment. If you are an off-campus student, this flexible delivery approach of offering online staff contact applies equally to you. The intention is to offer all students, irrespective of their enrolment type or physical location, access to the same support. Point is, just like other enrolment modes, you as a student can choose to take advantage of all or none of these contact options the choice is yours.

ACC00130 Unit Information

The requirements for you to work through content to read and learn, activities to complete and feedback to check are all on MySCU. The point of this is to facilitate your ability to work through the material to suit your particular constraints. You will need to go online to complete (though not necessarily prepare) assessment tasks. You will have the opportunity to benefit from the contributions of others in your unit to the extent that you choose. So, yes, this is different. You are required to give it a go. The flexible online approach has been designed and refined from previous experiences and it is there to support your learning efforts to the extent you choose. It is important to begin with the appreciation that we believe we are offering you more support than you are accustomed to, albeit in a way that is new to you. We are interested in your experience; but we are more interested in you having a good learning experience for auditing. Over to you.

Resources
Websites
Throughout the Study Guide you are provided with websites to explore if you have access to the Internet. I encourage you to share others you come across with the class via the discussion board section of the MySCU site. They should also be useful to some of you during your assessment tasks. Some key Internet website resources: 1. 2. CPA Australia
http://www.cpaaustralia.com.au

Institute of Chartered Accountants in Australia

http://www.charteredaccountants.com.au

If you are a student member (it is free to join) of either or both of these professional bodies, you will be able to use the entire website. You will need to apply for your username and password, which can be done via the website. Non-members have restricted access. 3. 4. 5. 6. 7. 8. 9. 10. 11. International Accounting Standards Board
http://www.iasb.org

International Federation of Accountants

http://www.ifac.org/

Australian Accounting Standards Board

http://www.aasb.com.au

Australian Accounting Research Foundation

http://www.auasb.gov.au

American Accounting Association (AAA)

http://aaahq.org

AAA Auditing Section

http://aaahq.org/audit/index.htm

AuditNet
http://www.auditnet.org

AICPA
http://www.aicpa.org

Institute of Chartered Accountants in England and Wales (ICAEW)

http://www.icaew.co.uk

ACC00130 Auditing

12. 13.

Information Systems Audit & Control Association and Foundation

http://www.isaca.org

The Institute of Internal Auditors

http://www.theiia.org

Each of these sites will have links of varying interest.

Unit statement
Southern Cross University
Southern Cross Business School

Description
Unit title: Unit code: Undergraduate, postgraduate: Prerequisites: Auditing ACC00130 Undergraduate ACC00145 Financial Reporting and 120 Credit value in any SCU units LAW00004 Company Law or LAW00527 Corporations Law Nil Nil Internal/online Graded 080101 Accounting 12

Corequisites:

Antirequisites: Other enrolment conditions & requirements: Student Services enrolment category: Graded/ungraded: Field of education: Credit points:

Aims
The development of auditing and assurance services within legal and professional frameworks is examined. This includes coverage of ethical and quality control issues. The assurance framework encompasses auditing, review and agreed-upon procedures, with different levels of assurance provided for each to meet the requirements of users/clients. The main focus will be on the audit an independent examination of the financial information prepared by the management of an entity. The impact of materiality and risk on evidence gathering and documentation requirements which support the opinion are introduced.

10

ACC00130 Auditing

Objectives
On completion of this unit, students should be able to: 1. 2. 3. 4. 5. 6. discuss the meaning and nature of auditing and assurance services identify and apply key auditing standards, ethical and quality control requirements for audit and assurance engagements analyse and evaluate the significance of materiality and risk to the steps in the audit process for gathering evidence discuss the importance of internal controls and IT (Information Technology) to the audit process identify and apply various audit sampling methods apply and evaluate the use of different types of audit opinions on financial reports.

Graduate attributes
As a graduate of the Bachelor of Business at Southern Cross University, you are more than just the sum of the knowledge you have acquired through your units. During your studies you will have developed other skills, values and attitudes that are essential for gaining employment and advancing life-long learning. The University refers to these skills, values and attitudes as the graduate attributes. In the unit Auditing, you will be assessed towards your attainment of the following graduate attributes, as identified by the Southern Cross Business School: 1. discipline competency: A command of the theoretical underpinnings related to a business discipline; and the ability to apply integrated business knowledge within their profession and undertake further learning. (SCU attribute Command of an Area of Knowledge) critical reasoning: The ability to make valid judgements that result in interpretation, analysis, evaluation, synthesis and inference; and explain the evidential, conceptual or contextual considerations upon which that judgement is based. (SCU attribute Intellectual Rigour) creativity: Not assessed. research/information literacy: Not assessed. numeracy: The ability to explain, interpret and apply relevant numeric data and models. (SCU attribute Intellectual rigour) communication: Not assessed. professionalism: The ability to apply domain specific knowledge; work independently; work effectively in teams; reflect on their own practice; and respond appropriately to change. (SCU attribute Effective communication and social skills and Lifelong learning) ethical understanding: The ability to apply and critique responsible management practices and evaluate their affect on all stakeholders. (SCU attribute Ethical understanding) global mindset: Not assessed.

2.

3. 4. 5. 6. 7.

8. 9.

Handbook entry
Introduces students to the concepts and practice of auditing, the way the profession has developed and the way the profession is meeting current business and social needs. In addition, the use of statistical techniques and EDP systems in auditing will be reviewed.

ACC00130 Unit Information

11

Syllabus
This unit comprises an introduction and four modules, and is based on a 120-hour workload for the student. The list below shows in brackets, the recommended number of weeks for the Introduction and each module: Introduction and perception (1 week) Module 1: Overview, client acceptance and evidence (3 weeks) Module 2: Planning and sampling (3 weeks) Module 3: Execution, controls and substantive strategy (4 weeks) Module 4: Concluding and reporting (1 week)

Prescribed texts and materials

There are three (3) prescribed items for this unit.

Prescribed item 1
The text to be used throughout the unit is: Moroney, R, Campbell, F & Hamilton, J 2011, Auditing: A Practical Approach, John Wiley and Sons Ltd, Australia, Milton, Qld. Whenever the topic refers simply to your textbook or text, it is the above text that is being referred to.

Prescribed item 2
You will also require the following book which contains the Australian Auditing Standards, Code of Ethics and Guidance Statements, which are continually referred to during this unit: ICAA Australia, Auditing and Assurance Handbook 2012, John Wiley & Sons Limited, Milton Queensland (ISBN 9781742465562). The 2011 version would be OK, though there are minor amendments you will miss. Only unmarked versions of the handbook will be allowed into the final examination (this is explained more fully below in the Assessment Details section). Please note that there is also a version of the 2012 Handbook published by Pearson on behalf of CPA Australia which is acceptable, BUT please note that older versions will not be acceptable because the outdated standards will not align with references in your Study Guide or textbook.

Prescribed item 3
The following case study is prescribed because it is as integral to your learning as the text and the standards. Your decision to avoid purchasing and using it will only affect one person and their learning and you do so at your own peril as it is examinable like the other prescribed material. Approximately 50% of the activities you are asked to complete are derived from this case study. Trussel, J & Frazer, JD 2008, The Lakeside Company: Case Studies in Auditing, 11th edn, Prentice Hall, Upper Saddle River, NJ. You are asked to note that each of above books is prescribed. You will only be disadvantaging yourself if you choose to ignore the prescription.

12

ACC00130 Auditing

Recommended reference materials

In addition to the text, you may find the following references useful for alternative explanations of the matters discussed in this unit. Each could equally be used as a text. I make this point because if you are having difficulty understanding a particular point, it is often made clearer by an alternative way of expression. Since the content of these books is very similar, you may find the alternative presentations useful from time to time. Arens, AA, Best, PJ, Shailer, GEP, Fieldler, BA, Elder, R & Beasley, M 2010, Auditing and Assurance Services in Australia: An Integrated Approach, 8th edn (Clarity Updated), Pearson, Sydney. Gay, G & Simnett, R 2010, Auditing and Assurance Services in Australia, 4th edn, McGraw Hill, Sydney. (An earlier edition of the books above would be equally useful just be aware that the earlier editions will not contain current audit reporting requirements or standards.) The following references may appear to be dated, however, they are two of the very few attempts at developing a theory of auditing. The principles and arguments remain valid despite the current era being dominated by regulatory capture (a fancy way of saying auditing is driven by legislation, no longer selfregulated). Mautz, RK & Sharaf, HA 1961, The Philosophy of Auditing, American Accounting Association, Sarasota, FL. Schandl, CW 1978, Theory of Auditing: Evaluation, Investigation, and Judgement, Scholars Book, Houston, TX.

Student assessment requirements

The formal assessment requirements for this unit are intended to extend your knowledge of auditing rather than directly reflect material covered in the prescribed activities. That is, treat them as assignments that expect you to move beyond just your textbook. They are also designed to allow you to be flexible with their completion so you can fit them into/around your undoubtedly busy schedules. The assessment requirements involve the use of the MySCU site for this unit. A summary is presented in the table below (further details are explained in this Unit Information Guide and most thoroughly in the Your Assignments section of the MySCU for this unit):
Task Unit objectives assessed 1, 3 1, 2, 3, 6 24 16 1, 2, 5, 7, 8 depending on option chosen Graduate attributes assessed 1, 7 1, 2, 5, 7 Weighting % 5% 25% 20% 50% Week due

Assessment task 1 Assessment task 2 Assessment task 3 Examination

See your assignment section in MySCU See your assignment section in MySCU See your assignment section in MySCU See assessment details section below

Students must keep copies of work submitted. This is a graded unit and grades shall be awarded as detailed in Rule 3.8 of the Universitys Rules Relating to Awards.

ACC00130 Unit Information

13

In order to achieve a passing grade in this unit, all assessment tasks must be completed, you must obtain a minimum score of 50% in the final examination and a score of at least 50% of the total assessment marks for the unit. The criteria upon which performance in the assessment tasks is judged is explained in the Your Assignments section of the MySCU site. This unit also provides an informal, formative (progressive) assessment. This assessment consists of the activities set out for each of the Modules (questions and exercises from the Lakeside case study and your text). You are directed to, or provided with, relevant feedback for these activities in the MySCU site. The intention is for these activities and associated feedback to be used by you, to assess your understanding and on-going performance, as you move through the study material. This informal assessment is not graded; however, it represents and forms the basis for the types of questions that will be included in your final examination. It is also designed as an integral part of the weekly live online contact with staff and the use of DFs for each Module.

School extension policy

Students wanting an extension must make a request at least 24 hours before the assessment item is due and the request must be received in writing (meaning email) by the unit assessor or designated academic. Extensions within 24 hours of submission or following the submission deadline will not be granted (unless supported by a doctors certificate or where there are exceptional circumstances this will be at unit assessors discretion and will be considered on a case by case basis). Extensions will be for a maximum of 48 hours (longer extensions supported by a doctors certificate or exceptional circumstances will be considered on a case by case basis). A penalty of 10% of the total available marks will accrue for each 24-hour period that an assessment item is submitted late. Therefore an assessment item worth 20 marks will have 2 marks deducted for every 24-hour period and at the end of 10 days will receive 0 marks. Students who fail to submit following the guidelines in this Unit Information Guide will be deemed to have not submitted the assessment item and the above penalty will be applied until the specified submission guidelines are followed. Student assessment and examinations Students are advised to refer to the University rules to ensure they follow the procedures in place in making applications for special consideration or query of assessment and final grade. These are listed under Rule 3 and can be found at the following website:
http://www.scu.edu.au/handbook/rules-relating-to-awards

Student academic integrity

It is a University requirement that a students work complies with the Academic Policy, Chapter 4.20 on Student Academic Integrity. It is a students responsibility to be familiar with the Policy. Failure to comply with the Policy can have severe consequences in the form of University sanctions. For information on this Policy please refer to Chapter 4.20 on Student Academic Integrity at the following website:
http://www.scu.edu.au/governance/academicboard/policy/

under Student Values and Rights.

14

ACC00130 Auditing

As part of a University initiative to support the development of academic integrity, assessments may be checked for plagiarism, including through an electronic system, either internally or by a plagiarism checking service, and be held for future checking and matching purposes.

Student feedback
Students are encouraged to complete the online student feedback on learning and teaching survey. This is offered for all units in every study period.

Assessment details
Assignment due dates and the examination period provided here apply to the Australian study period. These may be varied for students studying elsewhere, please confirm dates with your local tutor.

Assignment submission
Instructions for submission of each task are set out in the relevant folders in the Your Assignments section of the MySCU site.

Assessment tasks
Specific details for each assessment task, including due dates, are available from the Your Assignments section of the MySCU site. Please be sure to read them carefully and thoroughly.

Assessment task 1
Weighting: 5%

Assessment task 2
Weighting: 25%

Assessment task 3
Weighting: 20%

Final examination
Exam period: Weighting: 24 May 2 June 2012 50%

The final examination is scheduled for the end of the study period. Students will be fully advised during the study period as to when the exam will be held and the format it will take. The exam will be (by Student Services, not your unit assessor) and the format it will take (by your unit assessor). The exam will be closed book, except as noted below. The exam will be of three hours duration. Students will be permitted to take an unmarked (*see end of this section for explanation) copy of the Auditing and Assurance Handbook into the examination. Please note that no copies of past exams are provided. The reason is that my experience has shown students focus on the form and content of the sample at the expense of the unit materials they are supposed to be learning. Accordingly, I have found that encouraging students to focus on the materials presented and to be confident about applying the Lakeside context to the principles covered, increases

15

16

ACC00130 Auditing

their appreciation of the unit. In addition, it is common for students to suggest that there are a lot of activities to work through if that is the case, it does not make sense for me to provide more by way of copies of past exams at the end of the study period. You can be assured that the exam will cover only material you have been asked to learn for this unit. Similarly, regular use of your Auditing and Assurance Handbook will be beneficial as encouraged and demonstrated throughout the unit. Since the activities are derived 50% from your text and 50% from the Lakeside Company case, regular completion of these will stand you in good stead for what will be examined. The only additional (limited) information that will be provided concerning your final examination will be provided in the Exam Information folder in the Unit Documents section of MySCU. This information will indicate the number and value of questions contained in the exam so you can work out your time allocations for each question. A notice (announcement) will be posted on MySCU alerting you to when this information has been made available (not likely before the recommended end of Module 3). No indication of specific topics covered will be provided two reasons are offered for this. First, the students who want this information are invariably those who (for whatever reason) have not been diligent in working through all the material during the course of the teaching period and seek a shortcut about what to cover the material provided is all important or there would be no point providing it. In short, I have no intention of disadvantaging those who have worked hardest at completing the unit. Second, and more importantly, you will come to appreciate the integrated nature of auditing and notice as you work through the activities the number of times feedback draws on material from a number of topics (and even other units you have studied). Hence it is unlikely that the exam will not include the opportunity to demonstrate what you have learned in all topics at some stage. Note: Students are permitted to take a hard copy standard English translation dictionary into the examination. Electronic translation dictionaries are not permitted. (*) What does unmarked mean? No tabs to quickly locate particular standards use the contents page or the logical numerical sequence and pre-printed markers on the side of the Handbook. No underlining or highlighting of any kind. No notes and summaries make them in your text (hard or electronic copy) elsewhere but do not make them in your Handbook if you wish to use it in the final examination.

Note: Students are permitted to take a hard copy standard English translation dictionary into the examination. Electronic translation dictionaries are not permitted.

Census dates
The census date is the day upon which your enrolment for the study period becomes fixed. You cannot enrol or withdraw from units after census date without significant academic and/or financial penalties. If you are using the FEE-Help or HECS-Help Government loan schemes, your debt for the study period is deferred on census date. You will need to go to My Enrolment at http://www.scu.edu.au/myenrolment to check your census dates. Select Current Enrolment including Census date from the menu item called My Study Plans. Each unit in which you are enrolled will be displayed with its census date clearly identified.

Suggested study timetable

This blank timetable has been provided to help you plan your studies. You may like to fill in the details in consultation with your tutor.
Week/ commencing 1 20 February 2 27 February 3 5 March 4 12 March 5 19 March 6 26 March 7 2 April 8 9 April 9 16 April 10 23 April 11 30 April 12 7 May 13 14 May Topic no. Topic Notes

Study Week

17